In a statement that is galvanizing cryptocurrency investors and enthusiasts alike, the on-chain analytics firm CryptoQuant’s founder has put forth a stirring projection: Bitcoin’s value may ascend to a staggering $112,000 over the course of the year, predominantly propelled by the robust influx of capital into exchange-traded funds (ETFs).
The impetus behind this bullish forecast lies in the inflows directed toward spot ETFs, with CryptoQuant’s CEO Ki Young Ju meticulously dissecting the trajectory of the pioneering digital currency. His methodology employs the benchmark “Realized Cap” indicator, a sophisticated capitalization model for Bitcoin that appraises the cumulative valuation of the cryptocurrency. This is achieved by gauging the cost basis of coins in circulation based on the price at which they were last exchanged on the blockchain.
This meticulous approach assumes that every transaction reflects a transfer of ownership and consequently, the price of each transfer solidifies the cost basis for the coin in question. Hence, the Realized Cap is essentially an aggregate of the invested capital by all token holders.
A particular factor that could considerably influence the Realized Cap this cycle is the activity of spot ETFs. Having secured the green light from the US Securities and Exchange Commission just a month prior, these ETFs have been actively acquiring Bitcoin at higher market prices, thereby contributing to the elevation of the Realized Cap.
Data drawn from the holdings of spot ETFs and the Bitcoin Realized Cap posits a clear upward trend. As per Ju’s analysis, the Bitcoin market could see $9.5 billion per month coursing into spot ETFs, which has the potential to escalate the Realized Cap by an annual rate of $114 billion. This surge, factoring in current outflows from other fund types like $GBTC, suggests a sizable increment in the Realized Cap from $451 billion to a range between $527 billion and $565 billion.
The prognostication also delves into the Market Value to Realized Value (MVRV) ratio, which assesses the juxtaposition of the BTC Market Cap and the Realized Cap. Historically, the market bottoms and peaks of Bitcoin have been traced at MVRV ratios of 0.75 and 3.9, respectively. Applying these historic norms, Ju outlines potential ceiling and floor prices for Bitcoin, hinting that the impression of spot ETF inflows on the Realized Cap could increase the possible ceiling for the cryptocurrency’s value.
Underpinned by current trends, Ju speculates that the uppermost price point for Bitcoin could touch the range of $104,000 to $112,000. In case the market maintains its level without additional hype, even a price range of $55,000 to $59,000 would be a significant milestone.
Should Bitcoin reach that lofty $112,000, it would mark a jaw-dropping 126% escalation from its current market price. At the time this analysis was presented, Bitcoin stood at a valorous $49,400, exhibiting a remarkable 15% appreciation just within the span of a week. This impressive trajectory suggests heightened market optimism and reinforces the potentiality of reaching newly charted financial heights.
